Hester 'should not face bonus cut'

Stephen HesterRoyal Bank of Scotland boss Stephen Hester should not have his bonus cut as a result of the rate-rigging scandal, the bank's chairman says.

Philip Hampton said the chief executive was doing the most difficult job in the industry, and his pay was relatively "modest".

Mr Hester also mounted a robust defence of his performance, insisting he had managed to get the taxpayer "off the hook" for huge liabilities over the past four years.

The comments came as the executives were grilled by the Parliamentary Commission on Banking Standards. Majority state-owned RBS was fined £390 million by US and UK regulators last week after damning evidence emerged of traders fixing the Libor interbank-lending rate.

Some 21 staff have left or are going through disciplinary proceedings in the wake of the revelations. But investment banking head John Hourican is the only senior figure to quit - sacrificing millions of pounds in bonuses and share options.

Sir Philip told the commission the abuses were so serious that they required a "serious senior captain on the bridge departure".

Asked why Mr Hourican had gone and not other executives such as the head of RBS Group's markets division, Peter Nielsen, the chairman replied: "Because he was the captain on that particular bridge."

When it was suggested that Mr Nielsen also had "shortcomings" over the scandal, he said: "We all have shortcomings."

Commission chairman Andrew Tyrie challenged Mr Hester on whether his remuneration package should be curbed as a result.

"I think that my bonus should be assessed on all of the things I do well and badly and judgment should be reached in the round," he said.
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